Tag Archives: Bankruptcy

American city Detroit files bankruptcy

Detroit files for bankruptcy protection

City losing residents as tax base shrinks

By The Associated Press

Once the very symbol of American industrial might, Detroit became the biggest U.S. city to file for bankruptcy Thursday, its finances ravaged and its neighbourhoods hollowed out by a long, slow decline in population and auto manufacturing.

The filing, which had been feared for months, put the city on an uncertain course that could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed.

“Only one feasible path offers a way out,” Gov. Rick Snyder said in a letter approving the move.

Read more » CBC
http://www.cbc.ca/news/business/story/2013/07/18/detroit-bankruptcy.html

Pakistan is near to declare bankruptcy

Rs100 crore a day

By Dr Farrukh Saleem

Pakistan’s Public Sector Enterprises (PSEs) are falling like nine pins. The Pakistan Railways, the Pakistan International Airlines, the Pakistan Steel Mills, the Pakistan Electric Power Company (Pepco), the Pakistan Agricultural Storage and Services Corporation (Passco) and the Utility Stores Corporation (USC) collectively end up loosing Rs360 billion a year – Rs100 crore a day every day of the year. That’s a hundred crore the government does not have – so it begs, borrows, steals and prints.

Currently, Nadeem Khan Yousufzai, MD PIA, is managing to lose Rs7 crore a day every day of the year. Haji Ghulam Ahmad Bilour, Federal Minister of Railways, is managing to lose Rs5 crore a day every day of the year. PIA’s half yearly report titled “Flying towards a prosperous future” reports that liabilities went up from Rs62 billion in 2005 to Rs200 billion in 2009. PIA’s annual report titled “We stand for national values” reports that net losses at the PIA have gone up from Rs4.4 billion in 2005 to Rs35 billion in 2008. At the Pakistan Railways, the overdraft now floats around a hefty Rs48 billion.

In mid-2009, the Pepco’s circular debt had reached a colossal Rs300 billion and that’s when the Government of Pakistan gave birth to another illegitimate dragon – Power Holding Company. The new dragon took over all of the Pepco’s sins by borrowing heavily from the banking sector but within two years of that take-over the Pepco committed 300 billion additional sins. And now the banks have not much left to lend.

The power sector debt – Rs485 billion and rising fast – just by itself has the potential of landing Pakistan’s entire banking sector into the gutter. Loosing Rs100 crore a day every day of the year will land the government into a ditch deeper than the government has ever been in.

We desperately need a Public Sector Turnaround Strategy (PSTS) without which our very survival as an effective nation-state is at stake. Our survival is at stake and yet our decision-makers are all about political rallies. I was once told that politics is the second oldest profession but the way our politicians are practicing politics it bears a close resemblance to the first. ….

Read more » The News

Past present: Why Sufism? By Mubarak Ali

To counter the emergence of fundamentalism in Pakistan, the ruling classes as well as intellectuals are advocating the revival of sufism. However, it is evident that ideas and the system cannot be revived because fundamentalism is a product of a certain time and space and fulfills the needs of that age.

Secondly, the very idea of revivalism indicates intellectual bankruptcy and lethargy of our intellectuals who are either not ready or do not have the capacity to understand the very phenomenon of religious extremism and its advent as a result of social, economic and political changes in society. A number of myths are associated with sufis. One of the arguments being that they converted non-Muslims and are responsible for the spread of Islam through the subcontinent. To portray them as missionaries discredits them as an impartial community. To convert someone means that they initially did not believe in the truthfulness of other religions. If this view is correct, it does not explain how they could create goodwill among people belonging to different religions.

Continue reading Past present: Why Sufism? By Mubarak Ali

Pakistan: Drifting towards fascism

Dictator Zia

by Mazhar Arif

Retreat of socialism, particularly in former Soviet Union, and rise of “Ziaism” in Pakistan depressed the progressive (Leftist) and secular forces in the country which resulted in fading of “battle of ideas” in media and educational institutions. The consequences are the general intellectual bankruptcy and emergence of media-obsessed intelligentsia and the result is the “Ziaized” elitist intellectuals are on the center-stage …

Read more → ViewPoint

Pakistan nears bankruptcy, yet its Army poaches most of the resources of the nation

As Pakistan nears bankruptcy, patience of foreign lenders wears thin

BY GRAEME SMITH

ISLAMABAD — A terrifying kind of mathematics has become popular among aid workers, analysts and others who spend their lives tracking the fate of Pakistan. It’s a back-of-the-envelope calculation about how the country will get through the coming years without declaring bankruptcy: take the country’s foreign debt ($53-billion), add interest, subtract the $1.8-billion that won’t arrive as scheduled on Jan. 1 from the International Monetary Fund because Islamabad failed to meet loan conditions. Add the staggering cost, perhaps $10-billion, of rebuilding after summer floods.

The numbers seem bleak. The government floated the possibility last week of running a deficit for the coming year of $15-billion.

Islamabad’s latest plan to raise revenue, a reformed tax law, has become bogged down by stubborn opposition parties, front-page criticism and street protests. The cabinet’s economic team is threatening to quit.

Pakistan needs a bailout. But is the country still a good investment?

“That’s the conversation people are having now, about whether you’d be throwing good money after bad,” said Mosharraf Zaidi, a development expert and policy analyst based in Islamabad.

The international community has accused Pakistan of poor financial management for years. Cables recently posted by the website WikiLeaks show a U.S. intelligence official complaining in 2008 about the country’s preference for spending money on strategic military hardware instead of development: “Despite pending economic catastrophe, Pakistan is producing nuclear weapons at a faster rate than any other country in the world.” …

READ MORE : Globe and Mail

The profit of misery: what they know and we do not

– Dr Manzur Ejaz

The ruling elites induce various crises to make money for themselves and their allies. From the power crisis to sugar shortages, every occasion is used to siphon off billions of dollars to private accounts. The misery of the Pakistani people has become a profitable commodity for the rich and powerful …

Read more : Wichaar

Crises emerged in Pakistan is a result of last 62 years’ policies

Wrong policies gave birth to crises in Pakistan

The Jeay Sindh Mahaz has said that the crises being faced by Pakistan are not the product of one day but the outcome of wrong government policies during the last 62 years. Central executive committee of the party, which met in Radhan on Friday, discussed the political situation of the country. The meeting said the crises that had emerged in the shape of Kerry-Lugar bill, NRO, religious terrorism, bankruptcy of the state institutions, judicial crisis and corrupt practices of ministers and advisers were the logical result of bad governance of the rulers during the last 62 years.

Continue reading Crises emerged in Pakistan is a result of last 62 years’ policies

Impending bankruptcy creates hope for reforms

– Gul Agha, Champaign, Illinois, USA, gul.agha@gmail.com
Let us hope the IMF does the right thing rather than push to punish rural poor through agricultural taxes and the like (as Dr. Shaikh believes). Already the rural areas are suffering (they should have been booming with the rise in world global price hikes), particularly in Sindh and Balochistan.

Sindh pays 70% of the revenue and almost 70% goes to the defense … Not really needing a security forces (like Costa Rica), the per capita Sindh govt. spending would be 9 times richer without establishment of Pakistan (even assuming Pakistan were apportioning on a per capita basis all of its civilian budget, which it is not).

“I see no option but for Pakistan to go, begging bowl in hand, to the IMF,” said Dr. Farzana Shaikh of London-based think-tank Chatham House.

Continue reading Impending bankruptcy creates hope for reforms